| Symbol | Last | Change |
|---|---|---|
| MWW | 7.18 | -0.21 |
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TMP Worldwide Earnings Release For The Three Months Ended December 31, 1998
Total Commissions and Fees --Interactive Division Commissions and Fees
Up 9.5% to $102.1 million Up 195.7% to $16.8 million
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)2
Up 70.9% to $17.1 million
Adjusted Net Income3
$4.3 million compared to a prior year net income of $1.9 million
Fully Diluted Adjusted EPS4
$0.14 compared to prior year at $0.06
Fully Diluted Weighted Average Shares Outstanding
30.8 million
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 19981
Total Commissions and Fees --Interactive Division Commissions and Fees
Up 27.3% to $406.8 million Up 160.8% to $48.5 million
Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)2
Up 49.0% to $66.8 million
Adjusted Net Income3
$20 million compared to a prior year net income of $10.7 million
Fully Diluted Adjusted EPS4
$0.65 compared to prior year at $0.38
Fully Diluted Weighted Average Shares Outstanding
30.7 million
TMP WORLDWIDE REPORTS STRONG GAINS IN EARNINGS PER SHARE Fully diluted adjusted EPSA up 133% to $0.14 in the fourth quarter of 1998; Up 71% to $0.65 for fiscal 1998
Company's Interactive Division, led by monster.com, reports full year revenue of $48.5 million, up 161% from the previous year; Posts operating profit of $1.2 million in fiscal 1998
NEW YORK, March 3, 1999 -- TMP Worldwide Inc. (NASDAQ: TMPW; ASX: TMP), the leading provider of global recruitment solutions including the dominant Internet career portal, monster.com, and the world's largest Yellow Pages advertising agency, today announced total commissions and fees of $102.1 million for the quarter ended December 31, 1998 compared to $93.2 million for the same period a year ago, an increase of 9.5%. Revenue growth in TMP's Interactive Division and cost efficiencies resulting from consolidation of acquired companies contributed to a 70.9% gain in EBITDA to $17.1 million, as adjusted to exclude the effects of pooling costs associated with the mergers completed during the quarter from EBITDA of $10.0 million a year ago.
Recruitment advertising commissions and fees remained virtually flat. Yellow page advertising commissions and fees were $21.9 million for the fourth quarter of 1998, as compared to $25.0 million for the fourth quarter of 1997, a 12.2% decrease which reflects shifts in the timing for closings of yellow pages directories and lower publisher incentives. Commissions and fees for the company's search and selection division were $23.1 million for the fourth quarter versus $22.0 million in 1997, a 5.0% increase. Internet revenue for the fourth quarter of 1998 increased 195.7 % to $16.8 million from $5.7 million in the fourth quarter of 1997.
For the fourth quarter of 1998, its third consecutive quarter of profitability, TMP's Interactive Division, led by monster.com, posted an operating profit of $1.0 million.
Andrew J. McKelvey, chairman and CEO of TMP Worldwide stated: "Of particular significance is the continued growth, organically and through acquisitions, of our career focused services, which supports our strategy of creating a suite of traditional and online products and services designed to serve employers and employees for a lifetime."
An important component of this strategy is the company's Interactive Division, anchored by monster.com, which was launched in mid-January 1999 as a result of the merger of the number-one and number-four rated online recruitment sites, the Monster Board® and Online Career Center, respectively, both owned by TMP. Monster.com is going global with local language services already existing in the United States, the United Kingdom, Canada (in French and English), Australia, the Netherlands (in Dutch and English) and Belgium (in French and Flemish), and will be coming soon to Germany, France and Singapore. McKelvey added, "Our Interactive Division has continued to post impressive results within a distinct online category – Careers. We plan to maintain this momentum by continuing to aggressively market our Internet services."
"Monster.com is committed to leading the online career market by offering innovative technology and superior services that give consumers and businesses more control over the recruiting process," said Jeff Taylor, CEO of TMP Interactive. "Our recent, highly successful Super Bowl ad campaign has put us far ahead of our growth projections. According to independent research conducted by Media Metrix, 3.0% of the entire U.S. Internet population visited Monster.com in January, nearly double that of our nearest competitor."
Mr. Taylor continued, "February tracking of our numbers show continuing gains in traffic. We plan to continue our marketing efforts and drive traffic to our site, in order to ensure that Monster.com remains the undisputed leader in the rapidly expanding online careers category."
Excluding fourth quarter merger costs of $11.9 million – the majority of which were related to employee stay bonuses incurred in connection with the company's acquisitions of TASA Holding, AG, an international executive search firm, Johnson, Smith & Knisely, a domestic executive search firm and Stackig Advertising, a leading high-tech communications agency, which are being accounted for as poolings of interests – the company reported a 92.0% increase in operating income for the fourth quarter of 1998 to $10.7 million from $5.6 million for the comparable period in 1997.
Adjusted net incomeA increased 126.0%, to $4.3 million in the fourth quarter of 1998 from $1.9 million in the fourth quarter of 1997. Fully diluted adjusted earnings per shareA increased 133.0%, to $0.14 in the fourth quarter of 1998 from $0.06 in the fourth quarter of 1997.
Jim Treacy, COO of TMP Worldwide commented, "Investors who study TMP's Executive and Internet Recruiting businesses will clearly see we have developed a leading corporate recruiting franchise. By integrating capabilities across business lines in order to leverage synergies and take advantage of operating efficiencies, we have been able to achieve leadership positions in each of our core industry segments."
Twelve Month Performance
TMP reported commissions and fees of $406.8 million for the twelve months ended December 31, 1998, compared to $319.5 million for the year-earlier period, an increase of 27.3%. Adjusted EBITDA for fiscal 1998 was $66.8 million versus $44.9 million for the same period a year ago, an increase of 49.0%.
Recruitment advertising commissions and fees were $167.2 million for fiscal year ended 1998, a rise of 31.5% compared to $127.2 million in 1997. Yellow page advertising commissions and fees were $99.4 million for 1998 versus $98.0 million for fiscal year ended 1997, a 1.4% increase. Commissions and fees for the company's search and selection division for fiscal year ended 1998 grew to $91.6 million as compared to $75.7 million, a 21.0% increase over the comparable period a year ago.
Twelve month revenue for TMP's Interactive division was $48.5 million, an increase of 161.0% from $18.6 million for the twelve months ended December 31, 1997. For the year, the Interactive division reported an operating profit of $1.2 million
Excluding merger costs of $21.5 million, the majority of which were related to employee stay bonuses incurred in connection with poolings of interests transactions entered into in 1998, the company reported an increase in operating income for twelve months of 54.1% to $46.0 million from $29.8 million a year ago.
Adjusted net incomeA increased 87.0%, to $20.0 million for the fiscal year ended 1998 from $10.7 million for fiscal year ended 1997. Fully diluted adjusted earnings per shareA increased 71.0%, to $0.65 for the fiscal year ended 1998 from $0.38 for fiscal year ended 1997.
"As we look toward 1999, our primary focus is to continue to grow our business organically and through accretive acquisitions," continued Andy McKelvey.
TMP Continues to Expand
TMP continued to expand its global expertise with the acquisition of three agencies. Bonde & Schmah and PMM Management Consultants, search and selection agencies headquartered in Germany, were completed in December 1998, and Sources, SA, a recruitment advertising agency, located in France, was completed in January 1999. These acquisitions represent approximately $10 million in annualized commissions and fees for TMP.
In January 1999, the company also completed the acquisition of Morgan & Banks Limited of Australia, the largest executive search and selection firm in Australasia and one of the largest in the world. Morgan & Banks was acquired in a pooling of interests transaction for approximately 5,450,000 TMP Worldwide shares, including the effect of Morgan & Banks options outstanding. The acquisition, the largest in TMP's history, is expected to be immediately accretive. On a proforma basis, the combined companies would have reported revenue of $660.3 million for the twelve months ended December 31, 1998.
Andy McKelvey added: "We have aggressively grown our Search & Selection business through a series of strategic acquisitions. With the acquisition of Morgan & Banks, we have expanded our infrastructure and have reinforced our position as the number one global online recruitment leader."
Special Note
The above statements include forward-looking statements based on current management expectations. Factors that could cause future results to differ from these expectations include: risks associated with acquisitions, competition and seasonality. Additional factors are described in the company's reports filed with the Securities and Exchange Commission.
Founded in 1967, TMP Worldwide, has more than 4,750 employees in 19 countries. The company's clients include more than 70 of the Fortune 100 and more than 400 of the Fortune 500 companies.
Monster.com (www.monster.com), the flagship product of the Interactive Division of TMP Worldwide, is the leading, global online network for careers, connecting the most progressive companies with the most qualified career-minded individuals. Monster.com is committed to leading the market by offering innovative technology and superior services that give consumers and businesses more control over the recruiting process. The Monster.com network consists of websites in the United States, Canada, the United Kingdom, the Netherlands, Australia and Belgium and will be coming soon to France, Germany and Singapore. More information about Monster.com is available at www.monster.com or by calling 1-800-MONSTER.
A condensed consolidated statement of income for the fourth quarter and twelve months ended December 31, 1998 for TMP Worldwide Inc. and subsidiaries follows. For an investment kit, please contact James J. Treacy at (212) 527-8604 or visit www.tmpw.com.
# # #
1Current and prior periods' results have been retroactively restated to reflect the effects of acquisitions accounted for as poolings of interests and which were completed prior to December 31, 1998. 2EBITDA is adjusted to exclude the effects of pooling costs incurred of $11.9 million and $21.5 million for the quarter and the year ended December 31, 1998, respectively. 3Net income is adjusted to exclude the effects of pooling costs incurred and the tax benefits thereon of $9.6 million and $15.8 million for the quarter and the year ended December 31, 1998, respectively. 4Available to common and Class B shareholders after excluding pooling costs and the tax benefits thereon.
AAdusted to exclude the effects of pooling costs incurred and the tax benefits thereon of $9.6 million and $15.8 million for the quarter and the year ended December 31, 1998, respectively.
TMP WORLDWIDE INC CONDENSED CONSOLIDATED STATEMENT OF INCOME(b) For the Year Ended (in thousands, except per share amounts)
December 31, 1998
December 31, 1997
Gross billings:
Recruitment
$794,234
$604,420
Yellow pages
485,205
469,342
Search & selection
92,604
76,533
Internet
54,269
19,640
Total
1,426,312
1,169,935
Commissions & fees:
Recruitment
167,234
127,211
Yellow pages
99,384
98,007
Search & selection
91,635
75,716
Internet
48,516
18,601
Total revenue
406,769
319,535
Operating expenses:
Salary & related cost
223,773
179,370
Office & general
126,835
102,547
Merger costs
21,526
CEO bonus
1,250
1,500
Amortization of intangibles
8,922
6,284
Total operating expenses
382,306
289,701
Operating income
24,463
29,834
Other income (expense):
Interest expense, net
(10,415)
(8,687)
Other
(926)
(202)
Total other income (expense), net
(11,341)
(8,889)
Income before taxes, minority interests & equity in earnings (losses) of affiliates
13,122
20,945
Provision for income taxes
8,476
9,969
Income before minority interests & equity in earnings (losses) of affiliates
4,646
10,976
Minority interests
0
143
Equity in earnings (losses) of affiliates
(396)
(33)
Net income
4,250
10,800
Preferred dividend(123)
0
Net income applicable to common and Class B common stockholders
4,250
10,677
Adjusted net income:
Net income
4,250
10,677
Merger costs
21,526
0
Tax benefit of merger costs
(5,745)
0
Adjusted net income
20,031
10,677
Net income per common and Class B common share
Basic
0.14
0.38
Diluted
0.14
0.38
Adjusted net income per common and Class B common share
Basic
0.67
Diluted
0.65
Weighted average shares outstanding
Basic
29,834
27,884
Diluted
30,673
28,376
Adjusted E B I T D A(c)
66,840
44,871
NOTE
(b) Current and prior period's results have been retroactively restated to reflect the effects of acquisitions accounted for as poolings of interests and which were completed prior to Dec. 31, 1998.
(c) Earnings before interest, income taxes, depreciation and amortization and adjusted to exclude the effects of merger costs for poolings. EBITDA is presented to provide additional information about the company's ability to meet its future debt service, capital expenditures and working capital requirements and is one of the measures which determines the Company's ability to borrow under its credit facility. EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity.
TMP WORLDWIDE INC CONDENSED CONSOLIDATED STATEMENT OF INCOME(b) For the Three Months Ended (in thousands, except per share amounts)
December 31, 1998
December 31, 1997
Gross billings:
Recruitment
$189,074
$185,462
Yellow pages
103,888
111,270
Search & selection
23,525
22,855
Internet
19,446
6,092
Total
335,933
325,679
Commissions & fees:
Recruitment
40,238
40,536
Yellow pages
21,912
24,970
Search & selection
23,143
22,038
Internet
16,792
5,679
Total revenue
102,085
93,223
Operating expenses:
Salary & related cost
54,096
52,936
Office & general
34,639
32,513
Merger costs
11,949
CEO bonus
125
375
Amortization of intangibles
2,508
1,816
Total operating expenses
103,317
87,640
Operating Income
(1,232)
5,583
Other income (expense):
Interest expense, net
(3,059)
(2,309)
Other
(105)
(125)
Total other income (expense), net
(3,164)
(2,434)
Income before taxes, minority interests & equity in earnings (losses) of affiliates
(4,396)
3,149
Provision for income taxes
811
1,313
Income before minority interests & equity in earnings (losses) of affiliates
(5,207)
1,836
Minority interests
0
(113)
Equity in earnings (losses) of affiliates
(99)
(13)
Net income applicable to common
(5,306)
1,936
Adjusted net income:
Net income
(5,306)
1,936
Merger costs
11,949
0
Tax benefit of merger costs
(2,376)
0
Adjusted net income
4,267
1,936
Net income per common and Class B common share
Basic
(0.18)
0.07
Diluted
(0.18)
0.06
Adjusted net income per common and Class B common share
Basic
0.14
Diluted
0.14
Weighted average shares outstanding
Basic
29,862
29,702
Diluted
29,862
30,212
Diluted for adjusted earnings per share
30,807
Adjusted E B I T D A(c)
17,148
10,032
NOTE
(b) Current and prior period's results have been retroactively restated to reflect the effects of acquisitions accounted for as poolings of interests and which were completed prior to Dec. 31, 1998.
(c) Earnings before interest, income taxes, depreciation and amortization and adjusted to exclude the effects of merger costs for poolings. EBITDA is presented to provide additional information about the company's ability to meet its future debt service, capital expenditures and working capital requirements and is one of the measures which determines the Company's ability to borrow under its credit facility. EBITDA should not be considered in isolation or as a substitute for operating income, cash flows from operating activities and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of the company's profitability or liquidity.
